Inside Disney’s New York Stream Factory

It’s early September, just two months before the Nov. 12 go-live date for Disney Plus. Michael Paull, president of Disney Streaming Services, sits five floors above Chelsea Market, the bustling mall and tourist attraction in Manhattan’s Chelsea neighborhood — in the global nerve center of the Mouse House’s video-streaming operations.

On Disney’s earnings call a few weeks earlier, CEO Bob Iger called Disney Plus “the most important product that the company has launched” during his 14-year tenure in the job. Paull and his team at DSS are responsible for the development, delivery, design, support and marketing of Disney Plus, as well as ESPN Plus.

The stakes are high for Disney’s multibillion-dollar push into the streaming wars. Paull admits feeling “great responsibility” in delivering on the Disney Plus promise. But he expresses confidence that DSS has engineered Disney Plus with the right set of initial features and, just as important, has the technical personnel and infrastructure to deliver on the goal of racking up as many as 90 million subscribers within the next five years.

“Being able to operate at scale is very different from being able to operate in sort of single-digit-million subscribers. It’s night and day,” he says.

That operational know-how, and the group’s Chelsea Market home base, came to Disney through its deal to acquire majority control of Major League Baseball’s BAMTech for $2.6 billion. It’s a business that has been pumping video online since 2002 and has an unmatched track record, says streaming analyst and consultant Dan Rayburn — who calls DSS the “special forces of the streaming industry.”

Disney Streaming Services has more expertise and more resources than anybody else in the industry,” he says. “They are just snapping up so many good people in the industry.”

What made BAMTech different is that it started life with a mission exactly aligned with Disney’s goals: taking media rights (in MLB’s case, launching the MLB.tv service) and monetizing them, says Joe Inzerillo, EVP and CTO of Disney Streaming Services.

“When you look at other companies that have acquired service providers it hasn’t always worked out, because those providers didn’t do in-house services,” says Inzerillo, who has been with the organization for 16 years. For BAMTech, “the technology grew as it needed to.”

Over the past year, Paull, who previously was Amazon’s VP of digital video, has dramatically expanded Disney Streaming Services to more than double its headcount, with most of its 1,600 employees based in New York. His hires have included senior VP of data Laura Evans, formerly with the New York Times, who has formed a new team dedicated to data and analytics. “We’re understanding user behavior,” she says. “And we’re reusing that data to enhance the customer experience.” Evans’ team also is applying data to marketing, with customer acquisition and retention programs.

Michael Paull, president, Disney Streaming Services

Another key Paull hire was Jerrell Jimerson, SVP of product officer for Disney Streaming Services, who leads the group’s product management, user experience (UX), and design. Jimerson, a 30-year-plus tech veteran who has worked at companies including iHeartRadio, PayPal, Yahoo and Apple, joined DSS in 2018.

The design philosophy for Disney Plus is bringing the media conglomerate’s brands front and center and let subscribers with varying affinities find just what they want to watch. “It’s not a kids’ service. It’s a four-quadrant product,” says Jimerson. “We wanted to create excitement about the brands without overwhelming the viewer.”

The DSS New York headquarters at Chelsea Market are in a building complex originally built by Nabisco that’s more than a century old. Tucked deep inside the structure, behind several security checkpoints, the Disney group that manages real-time video distribution is ensconced in brick-lined furnaces where Oreo cookies were once baked. DSS staffers refer to the area, outfitted banks of large overhead monitors, as “The Ovens.”

Along with New York, DSS runs video operations centers in Amsterdam and San Francisco, and eventually will open a facility serving Asia-Pacific. The global scope of Disney’s direct-to-consumer strategy and aggressive rollout plans presents another significant challenge for Paull. The company expects Disney Plus to be in all major markets by 2021, starting with Canada, the Netherlands, Australia and New Zealand in November.

“We have taken the programming that we had, and instead of selling that to third parties we’ve held it,” he says. “So once you made that decision to really do this, we recognized we need to do it quickly.”

DSS has been heavily focused on designing and testing Disney Plus, marking the first time movies and shows from Disney, Pixar, Marvel, Star Wars, National Geographic and other brands will come together in a unified streaming service. Last month, it launched a free test of Disney Plus in the Netherlands, aiming to get the product as bulletproof as possible ahead of commercial launch.

Disney Plus promises a set of robust features, including 4K content, the ability to download everything in the catalog for offline viewing, up to seven profiles per account, and up to four simultaneous streams. But the relatively fast timeline to launch meant some ended up getting tabled for now, including the ability to submit content ratings (although Paull argues such omissions can keep things simple).

“The biggest challenge is, until you put it out there in the wild and have real consumers using the product, you don’t know what you don’t know,” Paull says.

Fact Box: Disney Streaming Services

Employees 1,600 worldwide
NYC office space 100,000+ square feet
Major services Disney Plus, ESPN Plus, MLB.tv, Hulu’s live TV, Sony’s PlayStation Vue
Disney Plus operating costs (projected) Nearly $1b for fiscal 2020
Disney Plus subscriber base (projected) 60m-90m by September 2024

With the coming launch of Disney Plus, Paull and other Disney Streaming Services execs point to the company’s years of battle-tested experience in the biz. In addition to MLB.tv, it powers the live streaming TV for Hulu and Sony’s PlayStation Vue. It also runs ESPN Plus, which grew to over 2 million subscribers less than a year after its launch in April 2018.

Russell Wolff, EVP and GM of ESPN Plus, joined DSS in October 2018 after 21 years at ESPN. He says one of the biggest differences at a digital-focused entity like Disney Streaming Plus versus the TV world is the amount of data and insights the organization uses to make decisions. DSS, he says, has a culture of constantly testing and iterating.

“In my old job, I got a 60-day-old subscriber report,” Wolff says. “Now I have an app that tells me who signed up in the last 10 minutes.”

In New York, Disney will have a massive presence for years to come. The media conglomerate plans to construct a 19-story building at 4 Hudson Square in Tribeca with 1.3 million square feet of space, under a $650 million development deal. There’s no timetable for the construction of the complex, but it’s expected to combine Disney Streaming Services offices in the city under one roof, along with those of ABC and other Disney businesses.

Kevin Mayer, chairman of Disney Direct-to-Consumer & International (who is Paull’s boss), praises New York’s “vibrant, energetic and hardworking character.” The Big Apple ethos, he adds, is “a core part of the culture of [Disney Streaming Services] and why we’re excited to call NYC home for this important piece of the DTCI segment.”

To Paull, New York remains the ideal locale to recruit talent with a confluence of both tech and media experience. (He also likes that he can walk to the office from his home near Madison Square Park.)

“There’s no better city than New York,” says Paull. “The skills and capabilities we need are here in a way that you wouldn’t find in other parts of the country.”

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